Silvercorp Reports Record Silver Production, Sales and Cash Flows for Fiscal 2011 Q3: Net Income up 140% to $29.7 Million or $0.18 per Share
PRESS RELEASE
Trading Symbol: TSX: SVM February 8, 2011 NYSE: SVM
SILVERCORP REPORTS RECORD SILVER PRODUCTION, SALES AND CASH FLOWS FOR FISCAL 2011 Q3: NET INCOME UP 140% TO $29.7 MILLION OR $0.18 PER SHARE
VANCOUVER, British Columbia – February 8, 2011 – Silvercorp Metals Inc. (“Silvercorp” or the “Company”) today reported its unaudited financial and operating results for the third quarter ended December 31, 2010 (“Q3 2011”). Record silver production coupled with increasing silver prices resulted in record quarterly sales, cash flows from operations and net income. Silvercorp also provided its operational and financial outlook for fiscal 2012. The following financial results are expressed in US dollars (US$) unless stated otherwise.
THIRD QUARTER HIGHLIGHTS
Record silver production of 1.52 million ounces, a 25% increase compared to 1.22 million ounces in the third quarter of fiscal 2010 (“Q3 2010”);
Record sales of $51.8 million, up 66% from a year ago;
Record net income of $29.7 million, or $0.18 per share, a 140% increase from a year ago. Excluding all non-operational items, adjusted net earnings were $22.2 million, or $0.13 per share;
Record cash flows from operations (before non-cash working capital changes) of $31.6 million, or $0.19 per share, increased 68% from a year ago;
Achieved total production cost of negative $5.93 per ounce of silver and a cash cost of negative $7.13 per ounce of silver, maintaining Silvercorp’s position as the lowest cost silver producer among its industry peers;
Raised $110.5 million net proceeds from an equity financing;
Received a mining permit for the GC Silver-Lead-Zinc Project in Guangdong Province, China; Acquired a 70% equity interest in BYP Gold-Lead-Zinc mine in Hunan Province, China;
Dividend payment of $3.2 million, or CAD$0.02 per share; and Total cash, cash equivalents, and short term investments increased to $223.7 million.
FINANCIALS
For the third quarter of fiscal 2011, Silvercorp posted record net income of $29.7 million, or $0.18 per share, representing a 140% increase compared to the same quarter last year of $12.4 million or $0.08 per share. Excluding all non-operational items, which mainly consisted of (i) a $3.3 million dilution gain on our investment in New Pacific Metals Corp., an affiliate of the Company and (ii) a $3.7 million gain on our holding of held-for-trading financial assets, the adjusted net earnings were $22.2 million, or $0.13 per share. For the nine months ended December 31, 2010, net income increased 96% to $56.3 million or $0.34 per share, compared to net income of $28.8 million, or $0.18 per share a year ago. Earnings improved primarily as a result of higher realized selling prices combined with record high metal production.
Sales in the third quarter were a record high of $51.8 million, up 66% from $31.3 million in the same quarter last year. The increase was attributable to higher quantities of metals sold and higher realized selling prices for all metals produced by the Company. In Q3 2011, the Company sold 1.52 million ounces of silver, 18.8 million pounds of lead and 4.8 million pounds of zinc, representing an increase of 25%, 16%, and 8%, respectively, compared to 1.22 million ounces of silver, 16.2 million pounds of lead, and 4.5 million pounds of zinc in Q3 2010. The average realized selling prices for silver, lead, and zinc increased to $20.36/oz., $0.89/lb., and $0.70/lb., respectively, up by 57%, 17%, and 9%, respectively, compared with the metal prices realized in Q3 2010. Higher metal production and realized selling prices also resulted in revenue increasing by 58% to $124.9 million for the nine months period ended December 31, 2010. Cost of sales for the quarter was $11.8 million, representing a 67% increase as the Company mined 40% more ore and milled 79% more ore compared to the same quarter last year. For the nine months period ended December 31, 2010 and 2009, cost of goods sold were $31.8 million and $19.0 million, respectively. The cost of goods sold increased correspondingly with higher sales.
Gross profit margin for the quarter was 77%, unchanged from the prior year. The gross profit margin did not increase in line with metal prices, mainly due to the change in production mix compared to the same quarter last year. We successfully increased production at the HPG, LM, and TLP mines which have lower head grades relative to the Ying mine. In Q3 2011, 19% of Silvercorp’s silver production was from the HPG, LM and TLP mines compared with 11% in Q3 2010. For the nine months ended December 31, 2010 and 2009, gross profit margin was 75% and 76%, respectively.
In Q3 2011, the Company generated $31.6 million of cash flows from operating activities before non-cash working capital changes, representing a 68% increase from Q3 2010. For the nine months ended December 31, 2010, cash flows from operating activities, before changes in non-cash working capital, was $71.9 million, a 58% improvement from the same period last year.
The Company ended the quarter with $223.7 million in cash and short term investments, and working capital of $209.3 million. During the quarter the company paid $3.2 million in dividends, $11.3 million in capital expenditures, and raised $110.5 million net proceeds from an equity financing.
OPERATIONS
In Q3 2011, Silvercorp achieved record silver production of 1.52 million ounces, up 25% from a year ago. Total ore mined also increased 40% to a record 167,213 tonnes. For the nine months ended December 31, 2010, the Company mined 466,639 tonnes of ore, a 43% increase from the same period last year of 325,720 tonnes. Increased production from the TLP, HPG, and LM mines contributed to the record mine production.
A total of 161,528 tonnes of ore was milled in the quarter, representing a 79% increase compared to 90,460 tonnes of ore milled in the same quarter last year. During the nine months ended December 31, 2010, 461,270 tonnes of ore was milled, up 68% compared to 273,974 tonnes last year. The increased mill throughput was achieved as the second mill at the Ying Mining Camp commenced operations at the beginning of 2010, which increased our total milling capacity to 2,500 tonnes per day, providing room to accommodate future mine production growth.
Consolidated total production cost per ounce of silver was negative $5.93 and the cash cost per ounce of silver was negative $7.13, up approximately 10% compared to the total production costs and cash production costs per ounce of silver of negative $6.87 and negative $7.73, respectively, in same quarter last year. Cost increased mainly because of the relatively lower head grades compared to a year ago, offset by higher realized base metal prices. During the nine months ended December 31, 2010, the consolidated total production cost and cash costs per ounce of silver were negative $5.46 and negative $6.60, respectively, compared to negative $5.61 and negative $6.40 a year ago.
On a quarterly basis, cash mining cost decreased from $48.93 per tonne last year to $48.30 per tonne, but increased from $40.36 in Q2 2011. The increase resulted from (i) higher utility costs as diesel was used to generate additional electricity to support the increased production and as backup for power shortages, (ii) higher labour costs from the increase of year-end bonus accrual and (iii) higher material costs as more steel and other supplies were used in mine preparation and development.
Silvercorp’s total operational results for the past five quarters are summarized at Table 1 below:
| Table 1: Total Operational Results | Q3 2011 | Q2 2011 | Q1 2011 | Q4 2010 | Q3 2010 |
| 31-Dec-10 | 30-Sept-10 | 30-Jun-10 | 31-Mar-10 | 31-Dec-09 |
Ore Mined (tonne)
| Direct Smelting Ore(tonne) | 3,711 | 3,065 | 3,426 | 2,485 | 3,428 |
| Ore to be milled(tonne) | 163,502 | 151,380 | 141,556 | 78,549 | 115,907 |
| 167,213 | 154,445 | 144,982 | 81,034 | 119,335 |
Run of Mine Ore (tonne)
| Direct Smelting Ore(tonne) | 3,711 | 3,065 | 3,426 | 2,485 | 3,428 |
| Ore Milled(tonne) | 157,817 | 147,488 | 145,763 | 131,436 | 87,032 |
| 161,528 | 150,553 | 149,189 | 133,921 | 90,460 | |
| Mining costs per tonne of ore mined($) | 58.28 | 49.12 | 48.61 | 57.06 | 57.81 |
| Cash Mining Cost per tonne of ore mined($) | 48.30 | 40.36 | 40.33 | 47.36 | 48.93 |
| Non Cash Mining Cost per tonne of ore mined($) | 9.98 | 8.76 | 8.28 | 9.70 | 8.88 |
Head Grade of Run of Mine Ore Silver (gram/tonne) 312.0 326.3 303.8 440.8
330.0
| Lead(%) | 5.7 | 5.6 | 6.1 | 5.7 | 8.3 |
| Zinc (%) | 1.8 | 1.9 | 2.0 | 1.6 | 3.0 |
| Total Production Cost per ounce of Silver($) | (5.93) | (5.17) | (5.21) | (4.61) | (6.87) |
| Total Cash Cost per ounce of Silver($) | (7.13) | (6.30) | (6.31) | (5.64) | (7.73) |
Metal Sales Silver (in thousands of ounce) 1,343 1,387 1,079 1,220
1,523
Lead (in thousands of pound) 18,795 17,028 18,803 14,921 16,211 Zinc (in thousands of pound) 4,791 3,869 4,431 2,747 4,454
In Q3 2011, 81% of Silvercorp’s silver production was from the Ying Mine (89% in Q3 2010). The operational results for the past five quarters at the Ying Mine are summarized at Table 2 below:
| Table 2: Ying Mine Operational Results | Q3 2011 | Q2 2011 | Q1 2011 | Q4 2010 | Q3 2010 | ||||
| 30-Dec-10 | 30-Sept-10 | 30-Jun-10 | 31-Mar-10 | 31-Dec-09 |
Ore Mined (tonne)
| Direct Smelting Ore(tonne) | 3,640 | 3,017 | 3,339 | 2,418 | 3,357 |
| Ore to be milled(tonne) | 82,101 | 82,187 | 79,873 | 54,174 | 82,711 |
| 85,741 | 85,204 | 83,212 | 56,592 | 86,068 |
Run of Mine Ore (tonne)
| Direct Smelting Ore(tonne) | 3,640 | 3,017 | 3,339 | 2,418 | 3,357 |
| Ore Milled(tonne) | 81,700 | 79,995 | 81,898 | 70,214 | 70,776 |
| 85,340 | 83,012 | 85,237 | 72,632 | 74,133 | |
| Mining costs per tonne of ore mined($) | 64.12 | 54.79 | 55.10 | 57.50 | 56.90 |
| Cash Mining Cost per tonne of ore mined($) | 49.85 | 42.66 | 43.83 | 45.60 | 45.75 |
| Non Cash Mining Cost per tonne of ore mined($) | 12.13 | 11.27 | 11.84 | 11.15 |
14.27
Head Grade of Run of Mine Ore
| Silver (gram/tonne) | 499.0 | 461.0 | 470.5 | 429.3 | 488.5 |
| Lead(%) | 8.3 | 7.9 | 8.1 | 7.6 | 9.0 |
| Zinc(%) | 2.9 | 2.8 | 2.8 | 2.8 | 3.4 |
| Total Production Cost per ounce of Silver($) | (7.67) | (6.94) | (5.83) | (6.14) | (7.47) |
| Total Cash Cost per ounce of Silver($) | (8.76) | (7.99) | (6.80) | (7.26) | (8.36) |
Metal Sales
| Silver(in thousands of ounce) | 1,241 | 1,095 | 1,147 | 836 | 1,086 |
| Lead(in thousands of pound) | 14,862 | 13,486 | 14,230 | 11,097 | 14,327 |
| Zinc(in thousands of pound) | 3,954 | 3,275 | 3,605 | 2,747 | 4,038 |
EXPLORATION AND PROJECT DEVELOPMENT Ying Mining Camp, Henan Province, China
In Q3 2011, the Ying Mining Camp incurred exploration and development expenditures of $6.1 million. These expenditures were mainly used to delineate and upgrade mineral resources by tunnelling and diamond drilling, and to build shafts, declines and raises. A total of 18,240 metres of tunnel, 40,386 metres of diamond drilling and 443 metres of shafts, declines and raises were completed.
This underground drilling program discovered 18 new veins at the TLP Mine and 12 new veins at the LM Mine with numerous high grade pockets identified. Furthermore, many existing veins in the Ying Mining Camp were also substantially extended to down dip and along striking directions. It is expected that those new discoveries will add resources/reserves that will either extend the life of the mine or increase the current mining capacity as many of those pockets are close to the existing mining tunnels and can be quickly developed into mining stopes.
GC Project, Guangdong Province, China
In Q3 2011, the GC project in the Guangdong Province received its 30 year mining permit, issued by the Ministry of Land and Resources of China. The permit was issued on the terms applied for, covering the entire 5.52 square kilometre area of the GC Project and allows for the operation of an underground mine to produce silver, lead and zinc ore.
BYP Project, Hunan Province, China
In Q3 2011, Silvercorp announced the acquisition of a 70% equity interest in Yunxiang Mining Co. Ltd. (“Yunxiang”), a private mining company in Hunan Province, China. Yunxiang’s primary asset is the BYP Gold-Lead-Zinc mine (the “BYP mine”), located 220 km, or a 3 hour drive, southwest of Changsha, the capital city of Hunan Province, China. The total cost of the share purchase and the joint venture capital investment is approximately US$33 million. The transaction successfully closed subsequent to the end of the quarter.
Silvertip Project, British Columbia, Canada
In Q3 2011, Silvercorp completed the 2010 surface drilling program on the Silvertip silver-lead-zinc project in northern British Columbia, Canada. A total of 10,913 metres has been drilled from 36 holes. The 2010 drilling program has successfully defined and updated the silver-lead-zinc resources on extensions to the east and south of the main ore body. A new resource estimate is currently underway. Silvercorp also conducted a 4,113 line kilometers VTEM airborne geophysical survey over an area of 367 square kilometres and completed certain studies and reports required for a B.C. Small Mine Permit application. A total of $8.3 million in capital expenditures were incurred on the Silvertip project as of December 31, 2010, of which $6.3 million was for exploration and permitting and $2.0 million was for camp and infrastructure.
OUTLOOK FOR THE FORTH QUARTER OF FISCAL YEAR 2011
During the first nine months of fiscal year 2011, Silvercorp produced 4.25 million ounces of silver, at a cash cost of negative $6.60 per ounce, net of by-product credits. The Company also produced 54.6 million pounds of lead and 13.1 million pounds of zinc during the nine month period. Silvercorp expects to meet or exceed its forecast to produce 5.3 million ounces of silver for its fiscal year ending March 31, 2011.
OUTLOOK FOR THE FISCAL YEAR 2012 Production in China
From the four mines at the Ying Mining Camp production is expected to increase to 600,000 tonnes of ore at a grade of 325g/t silver, 0.4g/t gold, 6% lead and 1.9% zinc, yielding 5.6 million ounces of silver, 4,000 ounces of gold, and 90 million pounds of lead and zinc. Total production costs will remain unchanged at approximately $75 per tonne of ore.
The BYP mine is expected to commence production in the first quarter of fiscal year 2012 and is expected to mine and mill 130,000 tonnes of ore at a grade of 7 g/t gold, yielding approximately 26,000 ounces of gold at an estimated total production cost of $28 per tonne of ore.
Budgets for mill construction, mine development and exploration of three projects in China The total capital expenditures for the three projects in China are estimated at $67 million for fiscal 2012, which include capital expenditures of $53 million for mine development, mill construction, and other capital items (e.g. surface facilities, roads, land usage rights, and reporting) and exploration expenditures of $14 million to complete a 241,000 metre surface and underground drilling program. The budget estimate is based on the contracts on hand, designs by qualified Chinese engineering firms, and the Company’s past operation experience in China. The details for each project are as follows:
The Ying Mining Camp
- The capital expenditures for the Ying, TLP, LM and HPG mines and central mill are budgeted at $18.5 million which includes several vertical shafts, declines and raises totaling 7,000 metres ($5.6 million), 40,000 metres of horizontal tunnels for development and mining exploration ($7 million), 1,500 metres of ramps ($1.2 million), a new tailing facility ($2 million), and equipment as well as surface facilities ($2.7 million).
- The exploration expenditure for a 171,000 metre underground drilling program at the four mines of the Ying Camp is estimated to be $8.5 million.
The GC Project
- The capital expenditures for fiscal 2012 are budgeted at $22.5 million, which includes a 1,500 tonne per day mill and tailing dam ($12 million), land-usage rights ($5 million), a 1,500 metre ramp ($1.2 million), a 500 metre shaft ($1.5 million) and surface facilities ($2.8 million). By the end of fiscal 2012, it is expected that the GC project will achieve a 700 tonne per day mining capacity and a 1,500 tonne per day milling capacity. In order to bring the project into full mining production of 1,500 tonnes per day, further capital expenditures will be required for fiscal 2013 which are expected to be partially financed through cash flows generated from the GC project.
- As the Company has successfully obtained its mining permit for the GC project, drilling will resume in fiscal 2012. A 20,000 metre surface diamond drilling program is budgeted at $2.5 million.
The BYP Mine
- The capital expenditures for fiscal 2012 are budgeted at $12 million. In order to achieve an initial mining and milling capacity of 400 tonnes per day, or a total of 130,000 tonnes of ore for fiscal 2012, the Company will upgrade the existing 400 tonne per day floatation mill ($1.5 million), build a cement back-filling facility ($1.5 million), complete about 7,000 metres of mine development tunnels ($1.5 million), and acquire land usage rights and build surface facilities including roads, an office, accommodations and a laboratory ($2.5 million), for a total of $7 million of capital expenditures. In addition, to achieve a production capacity of 1,000 tonnes per day starting in fiscal 2013, the Company will spend $5 million to expand the 400 tonne per day mill to a 1,000 tonne per day capacity ($3.0 million) and develop 1,500 metres of ramp and access tunnels ($2 million) to allow mechanized mining in the future.
- The exploration expenditures for a 50,000 metre underground and surface drilling program are estimated to cost $3 million.
Silvertip project in Canada
The Company has budgeted $2 million to complete the ongoing environmental assessment study, to prepare and submit an application for a Small Mine Permit, and to complete a feasibility study for the project. In addition to the aggressive exploration program carried out by the Company to grow the resources and reserves in its operating projects, Silvercorp continually seeks acquisition opportunities in China and other jurisdictions.
CONFERENCE CALL AND WEBCAST INFORMATION
A conference call and live audio webcast to discuss these results is scheduled as follows:
Date: Wednesday, February 9, 2011 Time: 8:00 am PT (11:00 am ET)
Dial-In Number: 1-612-234-9959 Live audio webcast: www.silvercorp.ca (click on the link on the home page)
Playback webcast can be accessed at: www.silvercorp.ca
About Silvercorp Metals Inc.
Silvercorp Metals Inc. is engaged in the acquisition, exploration, development and mining of high-grade silver-related mineral properties in China and Canada. Silvercorp is the largest primary silver producer in China through the operation of the four silver-lead-zinc mines at the Ying Mining Camp in the Henan Province of China. Silvercorp is currently building the GC silver-lead-zinc project in Guangdong Province as its second China production base and foothold, and this will be followed by the third production foothold at the recently acquired BYP gold-lead-zinc project in Hunan Province. In Canada, Silvercorp is preparing to apply for a Small Mine Permit for the Silvertip high grade silver-lead-zinc mine project in northern British Columbia to provide a further platform for growth and geographic diversification. The Company’s shares are traded on the New York Stock Exchange and Toronto Stock Exchange and are included as a component of the S&P/TSX Composite and the S&P/TSX Global Mining Indexes.
For further information: SILVERCORP METALS INC., Rui Feng, Chairman & CEO and Lorne Waldman, Corporate Secretary, Phone: (604) 669-9397, Fax: (604) 669-9387, Toll Free 1(888) 224-1881, Email: [email protected], Website: www.silvercorp.ca.
CAUTIONARY DISCLAIMER -- FORWARD LOOKING STATEMENTS
Certain of the statements and information in this press release constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and “forward-looking information” within the meaning of applicable Canadian provincial securities laws. Any statements or information that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects”, “is expected”, “anticipates”, “believes”, “plans”, “projects”, “estimates”, “assumes”, “intends”, “strategies”, “targets”, “goals”, “forecasts”, “objectives”, “budgets”, “schedules”, “potential” or variations thereof or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements or information. Forward-looking statements or information relate to, among other things: the price of silver and other metals; the accuracy of mineral resource and mineral reserve estimates at the Company’s material properties; the sufficiency of the Company’s capital to finance the Company’s operations; estimates of the Company’s revenues and capital expenditures; estimated production from the Company’s mines in the Ying Mining Camp; timing of receipt of permits and regulatory approvals; availability of funds from production to finance the Company’s operations; and access to and availability of funding for future construction, use of proceeds from any financing and development of the Company’s properties.
Forward-looking statements or information are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those reflected in the forward-looking statements or information, including, without limitation, risks relating to: fluctuating commodity prices; calculation of resources, reserves and mineralization and precious and base metal recovery; interpretations and assumptions of mineral resource and mineral reserve estimates; exploration and development programs; feasibility and engineering reports; permits and licences; title to properties; First Nations title claims and rights; property interests; joint venture partners; acquisition of commercially mineable mineral rights; financing; recent market events and conditions; economic factors affecting the Company; timing, estimated amount, capital and operating expenditures and economic returns of future production; integration of future acquisitions into the Company’s existing operations; competition; operations and political conditions; regulatory environment in China and Canada; environmental risks; foreign exchange rate fluctuations; insurance; risks and hazards of mining operations; key personnel; conflicts of interest; dependence on management; internal control over financial reporting as per the requirements of the Sarbanes-Oxley Act; and bringing actions and enforcing judgments under U.S. securities laws.
This list is not exhaustive of the factors that may affect any of the Company’s forward-looking statements or information. Forward-looking statements or information are statements about the future and are inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking statements or information due to a variety of risks, uncertainties and other factors, including, without limitation, those referred to in the Company’s Annual Information Form for the year ended March 31, 2010 under the heading “Risk Factors”. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, described or intended. Accordingly, readers should not place undue reliance on forward-looking statements or information.
The Company’s forward-looking statements and information are based on the assumptions, beliefs, expectations and opinions of management as of the date of this press release, and other than as required by applicable securities laws, the Company does not assume any obligation to update forward-looking statements and information if circumstances or management’s assumptions, beliefs, expectations or opinions should change, or changes in any other events affecting such statements or information. For the reasons set forth above, investors should not place undue reliance on forwardlooking statements and information.
Consolidated Balance Sheets - Unaudited
December 31, 2010 March 31, 2010
ASSETS
Current Assets
Cash and cash equivalents $ 196,428 $ 50,618
| Short term investments | 27,317 | 43,773 |
| Accounts receivable, prepaids and deposits | 8,153 | 2,474 |
| Inventories | 4,105 | 3,175 |
Current portion of future income tax assets 112 Amounts due from related parties 49 138 236,411 100,290
| Long term prepaids and deposits | 2,272 | 505 |
| Long term investments | 43,530 | 15,106 |
| Restricted cash | 79 | 78 |
| Plant and equipment | 33,744 | 29,024 |
| Mineral rights and properties | 158,155 | 133,248 |
| Future income tax assets | 1,125 | 1,203 |
$ 475,316 $ 279,454
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities $ 15,459 $ 7,504
| Deposits received | 2,873 | 6,737 |
| Bank loan and notes payable | - | 1,465 |
| Current portion of asset retirement obligations | 316 | 292 |
| Dividends payable | 3,511 | 3,238 |
| Income tax payable | 4,901 | 1,658 |
| Current portion of future income tax liabilities | 82 | - |
27,142 20,894
Future income tax liabilities 20,879 19,475 Asset retirement obligations 2,552 2,357 50,573 42,726
Non-controlling interests 29,308 21,738
SHAREHOLDERS' EQUITY
| Share capital | 263,181 | 145,722 |
| Contributed surplus | 4,587 | 4,702 |
| Reserves | 31,893 | 31,893 |
| Accumulated other comprehensive income | 31,552 | 14,910 |
| Retained earnings | 64,222 | 17,763 |
395,435 214,990
$ 475,316 $ 279,454
Consolidated Statements of Operations - Unaudited
(Expressed in thousands of U.S. dollars, except for per share figures)
2010 2009 2010 2009
Sales $ 51,838 $ 31,283 $ 124,905 $ 78,940
| Cost of sales | 9,983 | 6,010 | 26,882 | 16,157 |
| Depreciation, amortization and depletion | 1,820 | 1,043 | 4,869 | 2,796 |
| 11,803 | 7,053 | 31,751 | 18,953 | |
| Gross profit | 40,035 | 24,230 | 93,154 | 59,987 |
Expenses 42 122
| Accretion of asset retirement obligations | 32 | 93 | ||
| Amortization | 157 | 407 | 460 | 776 |
| Foreign exchange loss (gain) | 1,342 | 791 | 1,174 | (643) |
| General exploration and property investigation expenses | 58 | 941 | 2,493 | 4,207 |
| Impairment charges and bad debt | - | - | - | 698 |
| Investor relations | 174 | 131 | 345 | 312 |
| General and administrative | 3,647 | 2,688 | 11,145 | 7,221 |
| Professional fees | 185 | 201 | 759 | 1,439 |
| 5,605 | 5,191 | 16,498 | 14,103 | |
| 34,430 | 19,039 | 76,656 | 45,884 |
Other income and (expenses)
(131) (227)
| Equity loss on investment in NUX | (107) | (325) | |
| Dilution gain on investment in NUX | 3,332 - | 4,726 | - |
| - - | 537 |
Gain on disposal of mineral rights and properties -
| Loss on disposal of plant and equipment | (201) | (244) | (650) | (1,371) |
| Unrealized gain (loss) on held-for-trading securities | 3,668 | (10) | 3,745 | (22) |
| Gain on disposal of long term investments | 366 | - | 366 | - |
| Interest expenses | (10) | - | (40) | - |
| Interest income | 394 | 237 | 985 | 635 |
| Other income | 135 | 72 | 331 | 285 |
| 7,553 | (52) | 9,773 | (798) | |
| Income before income taxes and non-controlling interests | 41,983 | 18,987 | 86,429 | 45,086 |
Income tax expense (recovery)
Current 5,835 2,556 13,359 6,074
(735) 606
| Future | 125 | 351 | ||||
| 5,100 | 2,681 | 13,965 | 6,425 | |||
| Income before non-controlling interests | 36,883 | 16,306 | 72,464 | 38,661 | ||
| Non-controlling interests | (7,148) | (3,897) | (16,177) | (9,874) | ||
| Net income | $29,735 $12,409 | $56,287 $28,787 | ||||
| Basic earnings per share | $0.18 $0.08 | $0.34 $ |
0.18 Diluted earnings per share $ 0.18 $ 0.08 $ 0.34 $ 0.18 Weighted Average Number of Shares Outstanding - Basic 166,965,680 162,379,441 165,541,533 161,853,198 Weighted Average Number of Shares Outstanding - Diluted 168,535,816 163,912,759 166,800,884 163,487,318
Consolidated Statements of Cash Flows - Unaudited
2010 2009 2010 2009
Cash provided by (used in)
Operating activities
Net income for the period $ 29,735 $ 12,409 $ 56,287 $ 28,787 Add (deduct) items not affecting cash :
| Accretion of asset retirement obligations | 42 | 32 | 122 | 93 |
| Depreciation, amortization and depletion | 1,977 | 1,450 | 5,329 | 3,572 |
| Equity loss on investment in NUX | 131 | 107 | 227 | 325 |
| Dilution gain on investment in NUX | (3,332) | - | (4,726) | - |
| Future income tax expenses (recovery) | (735) | 125 | 606 | 351 |
| Impairment charges and bad debt | - | - | - | 698 |
| Unrealized loss (gain) on held-for-trading securities | (3,668) | 10 | (3,745) | 22 |
| Gain on disposal of long term investments | (366) | - | (366) | - |
| Gain on disposal of mineral rights and properties | - | - | (537) | - |
| Loss on disposal of plant and equipment | 201 | 244 | 650 | 1,371 |
| Non-controlling interests | 7,148 | 3,897 | 16,177 | 9,874 |
| Stock-based compensation | 522 | 423 | 1,749 | 1,322 |
| Unrealized foreign exchange loss (gain) | (77) | 48 | 117 | (970) |
| Changes in non-cash working capital | 469 | (2,819) | (1,966) | (3,221) |
| Cash provided by operating activities | 32,047 | 15,926 | 69,924 | 42,224 |
Investing activities
Mineral rights and properties Acquisition and capital expenditures (8,460) (3,290) (20,378) (11,031) Proceeds on disposals - - 537 - Plant and equipment Acquisition (2,804) (574) (6,210) (1,382) Proceeds on disposals - 14 1 133 Long-term investments
| Acquisition | (8,319) | - | (10,338) | (1,323) |
| Proceeds on disposals | 1,113 | - | 1,113 | - |
| Net redemption (purchase) of short term investments | 16,900 | (4,532) | 17,109 | (5,251) |
| Prepayments to acquire plant and equipment | (955) | 1,360 | (2,187) | (638) |
| Cash used in investing activities | (2,525) | (7,022) | (20,353) | (19,492) |
Financing activities
Advances to related parties, net of repayments received 8 49 313 (56) Bank loan and notes payable Proceeds - - - 2,927 Repayments - - (1,473) (658) Non-controlling interests Distribution (3,898) (7,191)
(10,582) (10,582)
Cash dividends distributed (3,233) (3,366) (9,607) (8,898) Capital stock
| Proceeds from issuance of common shares | 111,934 | 770 | 113,951 | 828 |
| Cash provided by (used in) financing activities | 98,127 | (6,445) | 92,602 | (13,048) |
| Effect of exchange rate changes on cash and cash equivalents | 2,516 | 1,228 | 3,637 | 2,349 |
| Increase in cash and cash equivalents | 130,165 | 3,687 | 145,810 | 12,033 |
| Cash and cash equivalents, beginning of period | 66,263 | 49,816 | 50,618 | 41,470 |
Cash and cash equivalents, end of period $
Q3 Fiscal 2011 Three months ended December 31, 2010
| Direct Smelting Ore (tonne) | 3,640 | 71 | - | 3,711 |
| Stockpiled Ore (tonne) | 82,101 | 22,216 | 59,184 | 163,502 |
| 85,741 | 22,287 | 59,184 | 167,213 |
| Direct Smelting Ore (tonne) | 3,640 | 71 | - | 3,711 |
| Ore Milled (tonne) | 81,700 | 19,644 | 56,473 | 157,817 |
| 85,340 | 19,715 | 56,473 | 161,528 | |
| Mining cost per tonne of ore mined($) | 64.12 | 67.06 | 46.50 | 58.28 |
| Cash mining cost per tonne of ore mined($) | 49.85 | 58.15 | 42.33 | 48.30 |
| Non cash mining cost per tonne of ore mined($) | 14.27 | 8.91 | 4.17 | 9.98 |
| Unit shipping costs($) | 3.59 | 3.02 | 3.26 | 3.40 |
| Milling cost per tonne of ore milled($) | 13.89 | 13.21 | 13.56 | 13.69 |
| Cash milling cost per tonne of ore milled($) | 12.22 | 11.81 | 12.06 | 12.11 |
| Non cash milling cost per tonne of ore milled($) | 1.67 | 1.40 | 1.50 | 1.58 |
| Silver($ per ounce) | 3.37 | 8.48 | 10.74 | 4.63 |
| Gold($ per ounce) | 145.84 | 407.64 | - | 211.60 |
| Lead($ per pound) | 0.15 | 0.36 | 0.47 | 0.20 |
| Zinc($ per pound) | 0.12 | 0.29 | 0.37 | 0.16 |
| Total production cost per ounce of Silver($) | (7.67) | (2.13) | 3.96 | (5.93) |
| Total cash cost per ounce of Silver($) | (8.76) | (3.90) | 2.37 | (7.13) |
| Silver (%) | 92.9 | 92.7 | 85.9 | 92.0 |
| Lead(%) | 96.6 | 95.4 | 88.4 | 95.3 |
| Zinc(%) | 70.1 | 67.1 | 71.1 | 70.1 |
Head Grades of Run of Mine Ore
| Silver (gram/tonne) | 499.0 | 186.0 | 125.0 | 330.0 |
| Lead(%) | 8.3 | 4.1 | 2.3 | 5.7 |
| Zinc(%) | 2.9 | 0.6 | 0.8 | 1.8 |
Metal Sales
| Silver(in thousands of ounce) | 1,241 | 105 | 177 | 1,523 |
| Gold(in thousands of ounce) | 0.4 | 0.4 | 0.0 | 0.8 |
| Lead(in thousands of pound) | 14,862 | 1,618 | 2,314 | 18,795 |
| Zinc(in thousands of pound) | 3,954 | 167 | 671 | 4,791 |
| Silver($) | 25,248 | 2,142 | 3,610 | 31,000 |
| Gold($) | 392 | 359 | 1 | 752 |
| Lead($) | 13,263 | 1,418 | 2,071 | 16,752 |
| Zinc ($) | 2,750 | 117 | 467 | 3,334 |
| 41,653 | 4,036 | 6,149 | 51,838 |
| Silver($ per ounce) | 20.34 | 20.49 | 20.39 | 20.36 |
| Gold($ per ounce) | 881.35 | 985.07 | - | 946.61 |
| Lead($ per pound) | 0.89 | 0.88 | 0.89 | 0.89 |
| Zinc($ per pound) | 0.70 | 0.70 | 0.70 | 0.70 |
Q3 Fiscal 2010 Three months ended December 31, 2009
| Direct Smelting Ore (tonne) | 3,357 | 72 | - | 3,428 |
| Stockpiled Ore (tonne) | 82,711 | 17,200 | 15,995 | 115,907 |
| 86,068 | 17,272 | 15,995 | 119,335 |
| Direct Smelting Ore (tonne) | 3,357 | 72 | - | 3,428 |
| Ore Milled (tonne) | 70,776 | 14,943 | 1,313 | 87,032 |
| 74,133 | 15,015 | 1,313 | 90,460 | |
| Mining cost per tonne of ore mined($) | 56.90 | 59.96 | 60.40 | 57.81 |
| Cash mining cost per tonne of ore mined($) | 45.75 | 56.10 | 58.30 | 48.93 |
| Non cash mining cost per tonne of ore mined($) | 11.15 | 3.86 | 2.10 | 8.88 |
| Unit shipping costs($) | 3.60 | 2.78 | 2.80 | 3.38 |
| Milling cost per tonne of ore milled($) | 11.48 | 11.94 | 61.21 | 12.28 |
| Cash milling cost per tonne of ore milled($) | 10.45 | 10.85 | 44.28 | 11.01 |
| Non cash milling cost per tonne of ore milled($) | 1.02 | 1.09 | 16.92 | 1.27 |
| Silver($ per ounce) | 2.58 | 5.63 | 13.10 | 2.93 |
| Gold($ per ounce) | 83.44 | 288.55 | - | 128.91 |
| Lead($ per pound) | 0.15 | 0.31 | 0.87 | 0.17 |
| Zinc($ per pound) | 0.13 | 0.24 | - | 0.14 |
| Total production cost per ounce of Silver($) | (7.47) | (2.15) | 15.00 | (6.87) |
| Total cash cost per ounce of Silver($) | (8.36) | (2.71) | 14.00 | (7.73) |
| Silver (%) | 91.0 | 85.9 | 86.4 | 92.1 |
| Lead(%) | 95.8 | 94.0 | 90.5 | 96.7 |
| Zinc(%) | 76.0 | 75.0 | - | 75.9 |
Head Grades of Run of Mine Ore
| Silver (gram/tonne) | 488.5 | 235.7 | 86.9 | 440.8 |
| Lead(%) | 9.0 | 5.3 | 2.7 | 8.3 |
| Zinc(%) | 3.4 | 0.9 | - | 3.0 |
Metal Sales
| Silver(in thousands of ounce) | 1,086 | 133 | 1 | 1,220 |
| Gold(in thousands of ounce) | 0.2 | 0 | - | 0.5 |
| Lead (in thousands of pound) | 14,327 | 1,873 | 11 | 16,211 |
| Zinc(in thousands of pound) | 4,038 | 416 | - | 4,454 |
| Silver($) | 14,094 | 1,739 | 11 | 15,844 |
| Gold($) | 84 | 219 | - | 303 |
| Lead($) | 10,917 | 1,358 | 8 | 12,283 |
| Zinc ($) | 2,618 | 235 | - | 2,853 |
| 27,713 | 3,551 | 19 | 31,283 |
| Silver($ per ounce) | 12.98 | 13.11 | 11.00 | 12.99 |
| Gold($ per ounce) | 420.00 | 671.78 | - | 571.70 |
| Lead($ per pound) | 0.76 | 0.72 | 0.73 | 0.76 |
| Zinc($ per pound) | 0.65 | 0.56 | - | 0.64 |